Bargaining process

¹ ICC Rules, Art. 34(6).

² The authors recommend use of the term ‘partial awards’, rather than ‘interim’, or ‘provisional’, awards. The latter terms, particularly in the civil law context, can be interpreted to mean that such awards are not final, when they are indeed final; there is nothing ‘provisional’ about an award rendered before the conclusion of the arbitration.

³ Some modern arbitration statutes make a specific distinction between interim, partial, and final awards. The Netherlands Arbitration Act 1986, s. 1049, provides that: ‘The arbitral tribunal may render a final award, a partial award, or an interim award.’ The commentary on this article by Sanders and van den Berg, The Netherlands Arbitration Act 1986 (Kluwer International Law, 1987) suggests that: partial awards are given in respect of substantive issues that are separated, such as liability and quantum; interim awards are given on jurisdictional issues; and simple orders are made in respect of procedural issues. The Swiss Private International Law Act 1987 (Swiss PIL), Ch. 12, provides for ‘preliminary awards’ in relation to jurisdictional issues in s. 186(3), while ‘partial awards’ that finally determine the issue are provided for in s. 188: see Geisinger, International Arbitration in Switzerland: A Handbook for Practitioners (2nd edn, Wolters Kluwer, 2013), pp. 226–227.

⁴ The English Arbitration Act 1996, s. 39, is an exception to this general rule in granting a power to make ‘provisional awards’ if the parties agree that the arbitral tribunal shall have such power. Interestingly, s. 39 mentions the word ‘award’ only in the marginal note and the body of the section refers to ‘orders’. Whether such orders are enforceable under the New York Convention is questionable and would be a matter for the courts of the country in which enforcement is sought: see Hunter and Landau, The English Arbitration Act 1996: Text and Notes (Wolters Kluwer, 1998), p. 35.

⁵ See, e.g., ICC Rules, Art. 41.

⁶ And of arbitration agreements: see Chapter 2.

⁷ Broches, ‘Recourse against the award; Enforcement of the award: UNCITRAL’s Project for a Model Law on International Commercial Arbitration’ (1984) 2 ICCA Congress Series 201, at 208.

⁸ Model Law, Art. 16(3).

⁹ Some commentators have suggested that a ‘preliminary award’ may be treated as ‘provisional’. However, this concept seems to be fraught with peril; the authors suggest that any decision that is not finally determinative of the issues with which it deals should not be described as an ‘award’.

¹⁰ If a party is aggrieved by a procedural order or direction, it is sensible for that party to make a formal protest. In this way, it will reserve the position in case it emerges, at a later stage, that the ruling in question has, e.g., denied that party a proper opportunity to present its case or to respond to the case submitted by the opposing party.

¹³ Braspetro Oil Services Co. v The Management and Implementation Authority of the Great Man-Made River Project, Paris Cour d’Appel, 1 July 1999, (1999) XXIVa YBCA 297, at [1]‌–[4].

¹¹ Braspetro Oil Services Co. v The Management and Implementation Authority of the Great Man-Made River Project, Paris Cour d’Appel, 1 July 1999, (1999) 14 Mealey’s Intl Arb Rep 8, at [G-1]–[G-7].

¹² For a commentary on this decision, see Gill, ‘The definition of award under the New York Convention’ (2008) 2 Disp Res Intl 114, at 119, in which the author writes that ‘the court found that the “procedural order” was effectively an award because it settled a substantive issue between the parties. The tribunal was exercising its jurisdictional power and its decision was therefore an award’.

¹⁴ Groupe Antoine Tabet v République du Congo, Case No. 09-72.439, Cass. Civ. 1ere, 12 October 2011, n.p.

¹⁶ Ibid., at [4]‌.

¹⁵ Publicis Communications and Publicis SA v True North Communications Inc. (2000) XXV YBCA 1152.

¹⁷ Ibid., at [9]‌. For a commentary on this decision, see Murphy, ‘Enforceability of foreign arbitral decisions’ (2001) 67 Arbitration 369, at 371, in which the author concludes that:

[T]‌his decision has clearly announced that all orders or awards made in the arbitral process are capable of recognition and enforcement abroad by means of the New York Convention, so long as the finality test is satisfied … when rendering any decision, it may be prudent to determine whether or not the issue is being dealt with finally, to recite that in the decision and, despite the approach of the Seventh Circuit, to label the decision or order as an award to ensure that no argument of form over substance can take place.

¹⁸ See also LCIA Rules, Art. 32.2.

¹⁹ For example, ICC Rules, Art. 37(3); UNCITRAL Rules, Art. 40.

²⁰ ICC Rules, Art. 33.

²¹ For further discussion of interpretation, correction, and revision of awards, see paragraphs 9.200ff.

²² See Chapter 10, paragraphs 10.02, 10.08 and 10.64.

²³ See, e.g., UNCITRAL Rules, Art. 34(2).

²⁴ See the discussion of enforceability of partial awards in the United States in von Mehren, ‘The enforcement of arbitral awards under conventions and United States law’ (1985) 9 Yale Journal of World Public Order 343, at 362. The approach of the case that von Mehren cites, Sperry International Trade, Inc. v Government of Israel 532 F.Supp. 901 (SDNY 1982), continues to be followed for its proposition that partial awards disposing of issues separable from those that continue to be disputed are final for the purposes of judicial review and enforcement:

The New York Convention, the United Nations arbitration rules, and the commentators’ consistent use of the label ‘award’ when discussing final arbitral decisions does not bestow transcendental significance on the term. Their treatment of ‘award’ as interchangeable with final does not necessarily mean that synonyms such as decision, opinion, order, or ruling could not also be final. The content of a decision—not its nomenclature—determines finality.

See also, e.g., Santos v GE Co. No. 10 Civ. 6948, 2011 US Dist. LEXIS 131925 (SDNY 2011), at [14]–[15]; Yonir Techs, Inc. v Duration System (1992) Ltd 244 F.Supp.2d 195, 204 (SDNY 2002). ‘[T]‌hese authorities suggest that, regardless of whether the form of the arbitral measure (e.g., an award or order) resembles a final award, if the substance of the measure serves a discrete function and effects a final disposition of a particular issue, the interim measure is confirmable and enforceable’: Sherwin and Rennie, ‘Interim relief under international arbitration rules and guidelines: A comparative analysis’ (2009) 20 Am Rev Int’l Arb 318, at 326.

²⁵ See, e.g., UNCITRAL Rules, Art. 26 (‘Interim measures’).

²⁶ ICC Rules, Art. 2(v).

²⁷ For further discussion of partial awards in ICC arbitrations, see ICC, Final Report on Interim and Partial Awards of a Working Party of the ICC’s Commission on International Arbitration (1990) 2 ICC International Court of Arbitration Bulletin 26, at 30, in particular the discussion about terminology. The term ‘interlocutory award’ should never be used, because it leads to confusion with procedural directions, which are not given in the form of an award.

²⁸ LCIA Rules, Art. 26(7).

²⁹ Model Law, Art. 32(1). See Holtzmann and Neuhaus, A Guide to the UNCITRAL Model Law on International Commercial Arbitration (Kluwer Law, 1989), p. 868. The Model Law, Ch. IVA, does, however, expressly refer to interim measures and preliminary orders.

³⁰ It was perhaps to avoid uncertainty in this respect that some jurisdictions amended the Model Law to provide specifically so that the arbitral tribunal may make a partial award on any matter on which it may make a final award: see, e.g., the British Columbia International Commercial Arbitration Act, s. 31(6).

³¹ See paragraph 9.18.

³² In the United States, a partial award for the payment of freight was ‘confirmed’ by a court while there were still outstanding matters in dispute in the arbitration: Metallgesellschaft AG v M/V Capitan Constante and Yacimientos Petroliferos Fiscales 790 F.2d 280 (2nd Cir. 1986). The majority judgment lists cases endorsing the ‘proposition that an award which finally and definitely disposes of a separate independent claim may be confirmed although it does not dispose of all the claims that were submitted to arbitration’: ibid., at [3]‌. However, the dissent of Feinberg CJ noted the dangers of piecemeal review of arbitral awards. Since then, case law has followed the separability rule of the majority: see, e.g., In re Chevron USA, Inc. Case No. 08-08-00082-CV, 2010 Tex. App. LEXIS 459 (8th Cir. 2010), at [19]–[20]; Zeiler v Deitsch 500 F.3d 157, 168 (2nd Cir. 2007); Hart Surgical, Inc. v Ultracision Inc. 244 F.3d 231 (1st Cir. 2001); Publicis Communication v True North Communications Inc. 206 F.3d 725, 727 (7th Cir. 2000).

³³ Model Law, Art. 16(3).

³⁴ See paragraphs 9.11–9.15.

³⁵ See Chapter 6, paragraphs 6.54ff.

³⁶ Except in relation to issues of jurisdiction, where the respondent has not raised them, or has elected not to participate, as in Liberian Eastern Timber Corporation v Government of the Republic of Liberia (1987) 26 ILM 647, in which the government nominated one of the authors as an arbitrator, but then refused to take part in the proceedings, and the arbitral tribunal examined its jurisdiction—as required by the ICSID Arbitration Rules, r. 42(4)—and issued a partial award.

³⁷ Indian Foreign Awards (Recognition & Enforcement) Act 1961, s. 2.

³⁸ RM Investment & Trading Company v Boeing Company, 1994 (4) SCC 541, (1997) XXII Ybk Comm Arb 711.

³⁹ For a discussion of the procedure to be followed where one party fails or refuses to participate in an arbitration, see Chapter 6.

⁴⁰ See UNCITRAL Rules, Art. 39; LCIA Rules, Art. 27; International Dispute Resolution Procedures (International Arbitration), Art. 30; Stockholm Chamber of Commerce (SCC) Rules, Art. 42; English Arbitration Act 1996, s. 57(3)(b); Model Law, Art. 33(1)(b).

⁴¹ See, e.g., ICSID Rules, r. 49(2).

⁴² ICC Rules, Art. 35.

⁴³ This follows from the consensual nature of arbitration: see Chapter 5, paragraph 5.33.

⁴⁴ Emphasis added.

⁴⁵ See, e.g., ICC Rules, Art. 32.

⁴⁶ Lesotho Highlands Development Authority v Impregilo SpA and ors [2003] EWCA Civ 1159.

⁴⁷ Lesotho Highlands Development Authority v Impregilo SpA and ors [2005] UKHL 43.

⁴⁸ Lew, Mistelis, and Kröll, Comparative International Commercial Arbitration (Kluwer Law International, 2003), p. 651.

⁴⁹ British Airways Board v Laker Airways Ltd [1985] AC 58 (HL).

⁵⁰ See paragraphs 9.49ff. It would lead to an absurd result if an arbitral tribunal applying US antitrust law could determine the issue of liability under that law, but not award the mandatory remedy provided for in that law. The point was considered by a US court in PPG Inc v Pilkington Plc (1995) XX YBCA 885.

⁵¹ In ICC Case No. 5946 (1991) XVI YBCA 97, at 113, an ICC arbitration held in Geneva, a claim was made for exemplary damages, but this claim was refused on the basis that:

… damages that go beyond compensatory damages to constitute a punishment of the wrongdoer … [punitive or exemplary damages], are considered contrary to Swiss public policy, which must be respected by an arbitral tribunal sitting in Switzerland even if the arbitral tribunal must decide a dispute according to a law that may allow punitive or exemplary damages as such: see Art 135(2) Switzerland’s Federal Code on Private International Law of December 1987, which refuses to allow enforcement of a judgment awarding damages that cannot be awarded in Switzerland …

⁵² See Rookes v Barnard [1964] AC 1129. The three categories are: (a) abuse of power by servants of the government; (b) conduct that was motivated by the pursuit of profits; and (c) where punitive, or ‘exemplary’, damages expressly authorised by statute.

⁵³ For contract cases, see Addis v Gramophone Co. Ltd [1909] AC 488, with exceptions to the general rule at 495. For actions in tort, see Rookes v Barnard [1964] AC 1129, [1967] 1 Lloyd’s Rep 28 (HL).

⁵⁴ Examples of statutes that provide for multiple damages in the United States are the Racketeer Influenced and Corrupt Organizations Act of 1970 (RICO) and antitrust laws that provide for triple damages.

⁵⁵ Garrity v Lyle Stuart Inc. 40 NY 2d 354, 353 NE 2d 793 (1976).

⁵⁶ Willoughby Roofing Supply Co. v Kajima International Inc. 776 F.2d 269 (11th Cir. 1985), in which an arbitral award of punitive damages for wilful fraud in the inducement of a contract was upheld; Mitsubishi v Soler Chrysler-Plymouth Inc. 473 US 614 (1985), in which arbitral awards of statutory treble damages were approved for antitrust violations.

⁵⁷ Reymond, ‘The Rainbow Warrior arbitration between Greenpeace and France’ (1992) 9 J Intl Arb 92, at 93.

⁵⁸ Bundesgerichtshof (Neue Juristische Wochenschrift, 1992), at 3096ff. The Court has affirmed it in two more recent decisions: BVerfG, Beschluß vom 24.01.2007—2 BvR 1133/04; BVerfG, Beschluß vom 14.06.2007—2 BvR 2247/06.

⁵⁹ Similarly, Dutch courts have held that a judgment to pay punitive damages cannot be recognised and enforced in the Netherlands without further enquiry: see the decision of the District Court of Rotterdam, 17 February 1995, [1996] NIPR 205, at 207.

⁶⁰ For a comprehensive review of the powers of arbitrators to award punitive damages, see Gotanda, Supplemental Damages in Private International Law (Kluwer Law International, 1998), pp. 226–229.

⁶¹ While neither the US Federal Arbitration Act of 1925 (FAA) nor the Uniform Arbitration Act of 1955, as amended (UAA), expressly specifies the remedies available in international arbitrations taking place in the United States (e.g. the UAA, § 21, empowers arbitrators to ‘order such remedies as the arbitrator considers just and appropriate under the circumstances of the arbitration proceeding’), courts have confirmed that arbitrators have the power to award specific performance even if the arbitration agreement does not specify this remedy: see, e.g., Brandon v MedPartners Inc. 203 FRD 677, 686 (SD Fla. 2001).

⁶² English Arbitration Act 1996, s. 48(5)(b).

⁶³ Lew, Mistelis, and Kroll, Comparative International Commercial Arbitration (Kluwer Law International, 2003), p. 650.

⁶⁴ English Arbitration Act 1996, s. 48(5)(a).

⁶⁶ Case Concerning the Factory at Chorzów (Claim for Indemnity) (Germany v Poland) (the Chorzów Factory case) [1928] PCIJ Series A No. 17, at 47 (emphasis added).

⁶⁵ Cambodia v Thailand [1962] ICJ Rep 6.

⁶⁷ Texas Overseas Petroleum Co. and California Asiatic Oil Co. (Texaco) v Government of the Libyan Arab Republic (1978) 17 ILM 3.

⁶⁸ Ibid., at 36.

⁶⁹ British Petroleum Co. (Libya) Ltd v Government of the Libyan Arab Republic (1979) 53 ILR 297.

⁷⁰ This impracticability was recognised by the parties in the Aminoil arbitration: Government of the State of Kuwait v American Independent Oil Co. (Aminoil) (1982) 21 ILM 976. To avoid any doubt, it was specifically agreed in that case that restitution was not sought.

⁷¹ The Libyan government boycotted the proceedings throughout, after claiming that the dispute was not arbitrable because the acts of nationalisation were acts of sovereignty.

⁷² Texas Overseas Petroleum Co. and California Asiatic Oil Co. (Texaco) v Government of the Libyan Arab Republic (1978) 17 ILM 3, at 8.

⁷³ Saudi Arabia v Arabian American Oil Co. (Aramco) (1963) 27 ILR 117.